The projected quarterly loss, estimated at $5.46 per share, far exceeds analysts' average expectation of $1.84 per share, according to LSEG data. Boeing also anticipates quarterly revenue of $15.2 billion, falling short of the $16.27 billion forecasted by analysts. Following the announcement, Boeing's shares dropped 3.5% in after-hours trading.
Mounting Challenges
Boeing’s struggles began in 2019 with the twin crises stemming from two fatal crashes of its 737 MAX, exposing production flaws and regulatory lapses. These issues were compounded by the COVID-19 pandemic and subsequent production disruptions. In 2024 alone, the company reported nearly $8 billion in losses during the first nine months, worsened by a seven-week strike involving 33,000 workers.
The strike halted production of key models, including the 737 MAX, 777, and 767, while Boeing's defense and space division faced escalating challenges. These factors could push the company’s annual loss close to the $12 billion recorded in 2020, its worst financial year to date.
CEO Comments and Strategic Moves
Kelly Ortberg, who assumed the CEO role in August, acknowledged the "near-term challenges" but highlighted measures taken in the fourth quarter to stabilize operations. These steps included resolving the worker strike in November, restarting production lines, and raising $20 billion in capital.
Boeing reiterated plans to deliver its 777-9 model by 2026, though years behind its original schedule. However, the program has incurred a $900 million pre-tax earnings charge, partly due to increased labor costs stemming from the new labor contract.
The company’s commercial aircraft deliveries also saw a steep decline in 2024, with 348 jets delivered compared to 528 in the previous year. New orders halved compared to 2023, though Boeing secured some key contracts, including a deal with Turkey’s Pegasus Airlines for 100 737 MAX jets, a significant win against competitor Airbus.
Defense and Space Woes
Boeing Defense, Space, and Security faces further hurdles, expecting $1.7 billion in pre-tax earnings charges on its fixed-price development programs. These include the KC-46 tanker, T-7 trainer, Starliner capsule, two U.S. presidential aircraft, and the MQ-25 refueling drone.The KC-46 program alone faces an $800 million charge, partly attributed to strike-related delays. Meanwhile, a $500 million charge on the T-7 trainer follows the U.S. Air Force’s decision to delay procurement of the aircraft until fiscal year 2026.
The defense division is expected to post $5.4 billion in quarterly revenue, accompanied by an operating margin loss of nearly 42%.
Boeing will release its full quarterly results next week, providing further details on the financial impact of its operational and strategic challenges.